"Innovative Market Solutions to Help Businesses Make Informed Decisions"
Europe green steel market size was valued at USD 0.73 billion in 2023 and is projected to grow from USD 1.29 billion in 2024 to USD 64.82 billion by 2032 at a CAGR of 63.2% during the forecast period.
Green steel is steel produced without using fossil fuels. Steel manufacturers are trying to replace conventional production technology, which uses fossil fuels, with other production technologies, including Renewable – Electric Arc Furnaces (EAF), Hydrogen Direct Reduced Iron (DRI) – EAF, and molten oxide electrolysis.
As sustainability is becoming a new norm and need of the hour, the European Union, many individual governments in the region and the leading steel manufacturing companies are investing millions of dollars to make steel as green as possible. The Paris Climate Agreement highly emphasizes limiting global warming to 1.5°C as crossing this limit may unleash severe climate challenges, including droughts, heatwaves, and rainfall. Therefore, the European Union emphasizes the need for the development and commercialization of new low-CO2 technologies in this decade. Concisely, increasing investment in green steel production, growing modernization, and supporting regulations to attain sustainability targets set for the region will fuel the market growth to newer heights.
The COVID-19 pandemic had a detrimental impact on several industries, and the steel industry was no exception. Many countries in the region, including Germany, France, the U.K., Italy, and Spain, announced lockdowns, leading to restricted movement of materials. However, the industry is still at its nascent stage of development, with only a few pilot plants in operation. As a result, the COVID-19 outbreak had a low-to-no impact on the global market growth. However, the positive attitude created toward environmental sustainability will be a progressive foundation for the market.
Momentum Toward Renewable Electricity to Create Progressive Environment for Market
The steel industry has been at the forefront of the de-carbonization debate for many years. In response to this, Electric Arc Furnaces (EAFs) became commercially available, significantly reducing carbon emissions in steel production by nearly three-quarters compared to the traditional Blast Furnace-Blast Oxygen Furnace (BFO) method. Whereas the BF-BOF method produces 1.8 tons of CO2 per ton of steel produced, EAF only produces 0.6 tons of CO2 per ton of steel produced.
Apart from the EAF-based steel production technology, new emerging technologies, such as powering EAF with renewable electricity, will make this process 100% carbon-free, reducing carbon emissions to almost zero. In addition, other technologies, such as hydrogen-powered blast furnaces and molten oxide electrolysis, are set to create new routes to produce zero-carbon emission steel. In all three production technologies, renewable electricity will play an essential role in making these technologies carbon neutral and environment-friendly. Thus, momentum towards renewable electricity will create a progressive environment for Europe green steel market growth during the forecast period.
Request a Free sample to learn more about this report.
Rapid Adoption in Automotive Industry to Spur Demand for Green Steel
As the European Union continues to focus on sustainability and reducing carbon emissions, the automotive industry is set to become the first mover in adopting green steel. This type of steel is made using renewable energy sources and recycled materials, reducing its carbon footprint significantly. As more and more automakers commit to using sustainable materials to comply with regulatory standards, the demand for this eco-friendly material is expected to rise. In order to reduce their carbon footprint, automotive companies are turning to green steel as a sustainable solution. The solid geographical footprint of the many automotive giants, including Volkswagen, Porsche, Audi, Ford, Peugeot, Stellantis, BMW, Renault Group, Bosch, Mercedes-Benz Group AG, and Bayerische Motoren Werke AG, in the region is anticipated to drive the demand for green steel, which will enable them to comply with environmental regulations for the automotive industry. Such rising adoption of the product in the automotive industry is driving the market growth.
Enormous Investment Needed to Make Carbon-Free Steel May Limit Market Growth
While there is a growing demand for sustainable steel production, the high cost of transitioning to carbon-free methods may pose a challenge to its adoption. Nevertheless, the potential benefits of reduced carbon emissions and producing more environmentally friendly steel may outweigh the initial investment costs in the long run.
Efforts to move away from traditional steel to carbon-free steel will cost enormous amounts to steel manufacturers, delaying its mass production. As steel production relies more on electricity, natural gas, and hydrogen, it creates extra demand for these resources, which may hamper their existing flow of supply and demand. According to the European Environment Agency, renewable energy only accounts for nearly one-fourth of the total energy production in the region. To make steel green, manufacturers need electricity from renewable sources, and a massive surge in demand will require massive renewable energy projects fueling the initial cost.
In addition, no technology can mass-produce green hydrogen while it is in the R&D phase. According to estimates by one of the world’s largest steel makers, ArcelorMittal, it will cost USD 40 billion to decarbonize its operation in Europe alone. The huge costs associated with the usage of new technologies and renewable energy will hinder its expansion to a massive scale for the next few years.
Hydrogen Direct Reduced Iron (DRI) – EAF to Lead Market Due to Its 100% Carbon-Free Steel Production
Based on production technology, the market is segmented into Renewable – Electric Arc Furnace (EAF), Hydrogen Direct Reduced Iron (DRI) – EAF, and molten oxide electrolysis.
In terms of production technology, the Hydrogen Direct Reduced Iron (DRI) – EAF segment will hold the largest share of the Europe market by 2032. The efficacy of offering 100% carbon-free steel production will make it the dominant technology in the regional market. Hydrogen Direct Reduced Iron (DRI) - Electric Arc Furnace (EAF) is a process that utilizes green hydrogen to reduce iron ore into pure iron nuggets, which are then melted down in an electric arc furnace to produce steel. This whole process is accomplished using renewable electricity, which reduces carbon emissions to almost zero.
Another essential production technology is Renewable-electric – arc furnace-based steel production. EAF-based steel production is already a well-established production technology in Europe, and according to the European Steel Technology Platform, it accounts for nearly 46% of the total Europe steel production. Owing to the well-established EAF production base, making it carbon-free using renewable electricity will be easy and fast, which will drive the segment’s growth significantly during the forecast period.
To know how our report can help streamline your business, Speak to Analyst
Automotive Segment to Dominate Market Owing to Surging Adoption in Vehicle Production
Based on application, the market is segmented into building & construction, automotive, renewable energy infrastructure, home appliances, and others.
The automotive segment held the largest Europe green steel market share in 2023. Europe is among the leading automotive producers, producing almost 10.9 million units in 2022, which is approximately 8% more than in 2021. In addition, according to the European Automobile Manufacturers Association, the market share of electric vehicles rose to 14.6% in 2023. The rising share of electric cars portrays that Europe is on a journey to reduce the carbon footprint of its automotive industry. To reduce the industry’s emissions, green steel seems a promising solution, and thus, it will dominate the consumption in the market.
The building & construction segment is another prominent segment in the European market. The building & construction industry in Europe is witnessing a growing trend toward sustainable and eco-friendly materials, where green steel will be a crucial material. It is produced using renewable energy sources and has a significantly lower carbon footprint compared to traditional steel. Growing preference for green building materials and green steel being the most promising solution will increase the building & construction segment significantly during the forecast period.
The home appliances sector in Europe is witnessing a remarkable surge in the market. This growth is primarily attributed to the increasing consumer preference for energy-efficient and environmentally friendly appliances. Leading manufacturers in the industry are now adopting low-carbon materials, such as green steel to reduce their carbon footprint and meet the growing demand for eco-conscious products. With the increasing awareness and demand for green products among consumers, green steel is becoming a popular choice in the home appliances industry. As a result, the home appliances segment will grow considerably till 2032.
Europe held a significant share of the market in 2023. It is poised to grow significantly owing to the government’s various initiatives regarding sustainability, circular economy, and adoption of advanced technologies and materials. For instance, the European Research Council (ERC) awarded USD 2.8 million for five years of projects that focused on reducing iron oxides without carbon using hydrogen plasma. Similarly, H2 Green Steel, a Sweden-based startup, secured over USD 4.57 billion through private equity and debt sources for the manufacturing of green steel. In addition, leading economies in the European regions, such as Germany, the U.K., Italy, and France emphasize sustainable technologies, which will pave a growing trajectory for the European market.
Production Capacity Expansion and Collaboration are Key Strategic Initiatives Adopted by Companies
As the market is in the nascent stage of the product development cycle, a minimal number of steel manufacturing companies have planned to set up their production plants for the product. The leading manufacturers are actively pursuing organic and inorganic strategies, such as capacity expansion, collaborations, and sustainability initiatives to leverage the benefits of becoming the first movers in the market. Companies are also collaborating with raw material suppliers, technology providers, and end-users to build smooth production and sales across the supply chain.
An Infographic Representation of Europe Green Steel Market
To get information on various segments, share your queries with us
The report provides a detailed analysis of the market. It focuses on key aspects, such as leading companies, production technologies, and applications of the product. Besides this, it offers insights into the market and current industry trends, and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors contributing to the market's growth.
To gain extensive insights into the market, Request for Customization
ATTRIBUTE | DETAILS |
Study Period | 2022-2032 |
Base Year | 2023 |
Estimated Year | 2024 |
Forecast Period | 2024-2032 |
Historical Period | 2022 |
Unit | Value (USD Billion) Volume (Million Ton) |
Growth Rate | CAGR of 63.2% from 2024 to 2032 |
Segmentation
| By Production Technology
|
By Application
| |
By Country
|
Fortune Business Insights says that the global market size was valued at USD 0.73 billion in 2023 and is projected to record a valuation of USD 64.82 billion by 2032.
Recording a CAGR of 63.2%, the market will exhibit rapid growth during the forecast period of 2024-2032.
By application, the automotive segment held the highest share of the market in 2023.
The Hydrogen Direct Reduced Iron (DRI) - EAF segment is expected to be the leading segment in the market.
Rapid adoption in the automotive industry will spur the demand for green steel.
ArcelorMittal, H2 Green Steel, Thyssenkrupp Steel, and Salzgitter AG are the leading players in the market.
Momentum toward green materials and sustainability is anticipated to boost the adoption of the product.
US +1 833 909 2966 ( Toll Free )